Recent Market Action

The stock market has been reacting very positively to earnings reports that have been announced.  We are now at the height of the earnings season, and with only a few exceptions, most companies on our list of stock holdings have reported earnings at or above analyst expectations.  This is good news for a couple of reasons:  (1.) stock prices generally tend to follow earnings, and with earnings increasing at a faster rate than expected, this should support stock prices going forward and (2.) companies that report good profitability tend to be in a better position to hire workers than when they are finding business conditions and profits lagging.  Bottom line: This earnings season may be a harbinger of stronger economic growth and higher stock prices.

A sampling of earnings reports so far:

Du Pont beat estimates by 16 cents/share
General Electric beat estimates by 5 cents/share
Monsanto beat estimates by 3 cents/share
JP Morgan beat estimates by 13 cents/share
Eli Lilly beat estimates by 7 cents/share
US Bancorp beat earnings estimates by 3 cents/share
Intel Corp beat estimates by 10 cents/share
Freeport McMoran beat estimates by 32 cents/share
American Express beat estimates by a penny.
Baxter International beat estimates by 5 cents/share
McDonald's beat estimates by a penny
Honeywell beat estimates by 6 cents/share
Philip Morris International beat estimates by 2 cents/share


Companies coming in a bit light on earnings:

Verizon by 4 cents/share
Bank of America by 10 cents/share
Abbott Laboratories by 8 cents/share
EnCana by 11 cents/share
Union Pacific by 2 cents/share

Thus far, earnings season has treated investors well.